Trump’s Truth Social Has Lost $73 Million Since Its Launch In 2022

Topline

Former President Donald Trump’s social media site, Truth Social, has lost $73 million since its launch last year, according to a regulatory filing made on Monday that raises concern about the platform’s financial condition and its ability to continue operations.

Trump’s Truth Social platform has lost $73 million since its launch last year.

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Key Facts

Digital World Acquisition Corp, the special purpose acquisition company that intends to merge with Truth Social’s parent firm Trump Media & Technology Group (TMTG), disclosed the social media platform’s financial numbers in an SEC filing.

The filings show Truth Social lost $50 million in 2022 and another $23 million in the first half of 2023.

In its first year of operation, the company reported net sales of just $1.4 million, while the number for the first half of 2023 is $2.3 million.

The filings also disclosed that former Congressman Devin Nunes, who serves as TMTG CEO, was paid $750,000 in 2022.

The poor financial numbers raise “substantial doubt” about TMTG’s “ability to continue as a going concern,” the filing notes—although it is unclear how much of a financial runway the company has left.

Crucial Quote

“TMTG believes that it may be difficult to raise additional funds through traditional financing sources in the absence of material progress toward completing its merger with Digital World,” the filing adds. The SPAC merger between TMTG and DWAC was first announced in 2021, but the deal has been mired in legal trouble and its completion deadline was extended by another year in September.

What To Watch For

One of many potential risks outlined by the company includes Trump, TMTG’s chairman. The filing notes that the company’s success is heavily tied to Trump’s “reputation and popularity” and it “may diminish” if the former President’s popularity “were to suffer.” Highlighting Trump’s many ongoing legal cases, the filing notes that an “adverse outcome in one or more” proceedings may also negatively impact TMTG and Truth Social.

Big Number

$5 to $25 million. That is the estimated value of TMTG, according to financial disclosures made by Trump to the Federal Election Commission earlier this year. That is a pretty dramatic decline from the $875 million valuation for the social media company when the SPAC merger with DWAC was first announced.

Key Background

Last month, DWAC announced that a planned investment of nearly $191.5 million had fallen through. As DWAC’s merger deal meanders, the company has lost around $467 million out of $1 billion in prior investment commitments so far. Earlier this year, the blank check firm also disclosed that its financial statements through 2022 were no longer reliable due to an error “accounting for certain expenses.” The Nasdaq-listed firm’s market capitalization on Monday stood at around $545 million, down almost 85% from a near $4 billion valuation in March 2022.